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[Ozzie666]

Big chance they just become the Formerly FIFA and Madden yearly machine. It's really all they need isn't it? Not sure for how long, but still. I hope Respawn lands somewhere okay. Sell off IP's, massive cuts. Battlefield if it does well might survive.

I wonder if Trip is full of regret, still mad about the 3D0, or smirking.

 

[Toots]

You know this happens everyday right? This one is major and in the spotlight, that's why you're even hearing about it. That's how this economic system works.

Im aware we live in an unjust world where the worst human beings are rewarded yes if that was your question

 

[Hudo]

The worst thing I can see happening is that EA Sports is being spun off as its own company and the rest of EA gets shut down.

 

[bighugeguns]

I think the games press is going to absolutely pulverise EA games going forward, think the opposite effect of Ghost of Yōtei.

EA better start going wild with greasing palms.

 

[IAmRei]

I feel like nothing will really change.

As with Alien vs Predator once said: "Whoever wins, We lose"

 

[SEGAvangelist]

Wow. This is great news.

 

[Solarstrike]

A $50 BILLION valuation? How the fk and in what kind of corrupt and bullshit system built by the rich and only for the rich did that happen? How could the buyers afford that?

edit: Oh wait. Saudi Arabia is being used as a money laundering route for all that sweet tariff money ?

 

[IDKFA]

Thanks, now i get it.
Essentially this guys bought something with money they do not currently have, and the workers will likely pay for the debts these sharks made because they purchased EA with money they didn't have to begin with.

Am i understading this correctly?
High level finance surely looks like lots of fun.

The employees are not directly responsible for the debt. The debt will be paid off from the revenue generated by EA.

Does it mean that EA is independent from from those 3 companies and only own them money? Or they are own all or a large part of the EA?

EA is now a private company owned by these investment funds.

 

[Miles708]

The employees are not directly responsible for the debt. The debt will be paid off from the revenue generated by EA.

They aren't but they will be the first cut to be made when the earning graph isn't going up enough.

These pompous rich fucks gamble with money they don't have and others pay the price when it all inevitably fails. I can't help but think high level finance is just assholes fucking up stuff because they can, until they eventually get something right by accident.

Big business my ass.

 

[Ziglax]

I wonder how it is possible to make EA worse. But this will probably happen thanks to this deal.

 

[iHaunter]

EA was barely producing any games at all that were worth anyone's time. They were all macrotransaction filled copy/pastas from past years.

 

[poppabk]

The Saudi prince / Saudi public investment fund basically has infinite money.

But in terms of finantials there's a tool for very rich people that is better for them than to pay themselves the full amount of the acquisition called leveraged buyout, which is to get a bank on board to pay an important part of the acquisition with a new debt that will be paid with future profits of the acquired company.

Obviously banks aren't stupid and do it only in cases where they know the acquirer and the company won't have any issue to pay that debt.

 

[yurinka]

Very retarded post.

Toys R Us is totally unrelated to the video games market, saudi investment or a top grossing and very profitable leader in their industry like EA.

EA was barely producing any games at all that were worth anyone's time.

EA is the most successful 3rd party publisher in the world (when not counting console makers like Sony and MS).

They aren't but they will be the first cut to be made when the earning graph isn't going up enough.

These pompous rich fucks gamble with money they don't have and others pay the price when it all inevitably fails. I can't help but think high level finance is just assholes fucking up stuff because they can, until they eventually get something right by accident.

Big business my ass.

EA's yearly profit has been growing in the recent several years, the last one being $6B.

To increase their debt from $2B to $20B shouldn't be any issue for the company or workers, if desired they can easily pay it in a few years without affecting the company and workers at all.

Does it mean that EA is independent from from those 3 companies and only own them money? Or they are own all or a large part of the EA?

What happened means now people or investors can't buy EA stocks in the stock market because the saudis bought the company and now belongs to them, who made it private taking it outside the stock market.

This means nobody can buy EA if the saudis don't want to sell it, and in case some day the saudis decide to sell it (highly unlikely, they are building a portfolio of companies to diversify their industry, revenue and profit sources to depend less on oil in the future) would be paying whatever the saudis want.

The saudi's partners for the operation (Trump's jew son-in-law investment firm, company that runs mostly with money of that saudi fund, and Silver Lake) also got a small portion fo the company, which pretty likely later will be sold to the saudi fund.

 

[The Incarnation]

Hopefully they drop the NHL licence so that 2K can pick it up.

 

[poppabk]

Very retarded post.

Toys R Us is totally unrelated to the video games market, saudi investment or a top grossing and very profitable leader in their industry like EA.

But it was a leveraged buyout that killed a company by saddling it with debt.

 

[yurinka]

But it was a leveraged buyout that killed a company by saddling it with debt.

This is as retarded as saying that you'll get rich selling your first indie game because it will be a paid game like GTAV, which made a lot of money selling games.

Or that any company who has been acquired with a classical transaction of paying all cash without leveraged buyout will go bankrupt because whatever other company acquired in that way bankrupted.

It's nonsensical.

Due to different factors, Toys R Us was already fucked up and stagnant before the leveraged buyout acquisition. Basically had stagnant sales with a tiny market and other retailers like Walmart, Target or mainly Amazon were eating their market share, plus Toys R Us had many huge stores that were too costly.

The ones who bought it failed at trying to fix and modernize the company, and took a too large debt that the company wasn't able to pay.

It's a very different case of the EA one: EA is a very healthy and profitable market leader (the top 3rd party publisher) with a lot of valuable IPs and teams. A company whose yearly profits have been growing in the recent several years and are enough to pay the debt in 4 or 5 years if they would want to do so without making any change, but pretty likely will finance it at 10 or 20 years to have even less pressure. It's a company that doesn't need any meaningful fix, it performs great as they are.

And the EA buyer, the saudi's royal family PIF, didn't buy it like a vulture to make some aggresive changes and sell it later: bought it to turn it the crown jewel of the gaming section of the long term portfolio they are building to modernify and diversify the businesses of the county('s royal family). Even if EA stops being profitable (almost impossible) the saudis wouldn't give a fuck because they have mostly infinite money, directly or indirectly. They could have paid the $55B in cash themselves, but didn't need to do it because they have so much money that JPMorgan allowed them to do the $20B debt thing, obviously after making sure the company will be able to pay it -or in the unlikely case they don't, the saudis can pay it- without any issues.

 

[archangelmorph]

This is as retarded as saying that you'll get rich selling your first indie game because it will be a paid game like GTAV, which made a lot of money selling games.

Or that any company who has been acquired with a classical transaction of paying all cash without leveraged buyout will go bankrupt because whatever other company acquired in that way bankrupted.

It's nonsensical.

Due to different factors, Toys R Us was already fucked up and stagnant before the leveraged buyout acquisition. Basically had stagnant sales with a tiny market and other retailers like Walmart, Target or mainly Amazon were eating their market share, plus Toys R Us had many huge stores that were too costly.

The ones who bought it failed at trying to fix and modernize the company, and took a too large debt that the company wasn't able to pay.

It's a very different case of the EA one: EA is a very healthy and profitable market leader (the top 3rd party publisher) with a lot of valuable IPs and teams. A company whose yearly profits have been growing in the recent several years and are enough to pay the debt in 4 or 5 years if they would want to do so without making any change, but pretty likely will finance it at 10 or 20 years to have even less pressure. It's a company that doesn't need any meaningful fix, it performs great as they are.

And the EA buyer, the saudi's royal family PIF, didn't buy it like a vulture to make some aggresive changes and sell it later: bought it to turn it the crown jewel of the gaming section of the long term portfolio they are building to modernify and diversify the businesses of the county('s royal family). Even if EA stops being profitable (almost impossible) the saudis wouldn't give a fuck because they have mostly infinite money, directly or indirectly. They could have paid the $55B in cash themselves, but didn't need to do it because they have so much money that JPMorgan allowed them to do the $20B debt thing, obviously after making sure the company will be able to pay it -or in the unlikely case they don't, the saudis can pay it- without any issues.

I like your optimism here but I don't share it.

The Saud's aren't steering the ship here. The PE firms are.

Neither of these lot know a thing about managing big businesses in high risk creative industries but they will own their Executive MBA hubris and believe that they can apply the same tried and tested PE playbook shite they do across other sectors here without any consideration to the realities of the business and the risk it will effectively create that will inadvertently destroy their core business and not build it.

E.g.

In a heavily creative sector like games and movies, TALENT is your only REAL IP. Even most games execs don't really understand that simple idea.

These lot will understand that even less and they're already making noises about their intentions to erode talent by replacing it with AI labour/processes.

They think they can slim costs simply by cutting spending, when the biggest cost in this business by a country mile is talent, and yet they're be 1000% oblivious to the impact that will have on content quality, even against existing GaaS franchises that will end up burning MAUs as gamers get fed up with aggressively increasing enshittification and move on. This will impact sales and they'll enjoy wider margins against an altogether dismantled revenue base. Net net their profits will be fucked and the company will never be able to pay back the interest on that $20B debt ticket nevermind the principal.

The market will not absorb a lack of quality, and no fucking AI solution in the world will give them content quality, no matter how many Sam Altman PowerPoint presentations these noobs will sit through at investment summits.

This will end badly, even if EA started in a good place.

How badly and how quickly will depend on how long it take for the existing exec team's golden handcuffs to expire before they fuck off when their multibillion checks finally clear…

 

[Avid Reading Horse]

Trump's jew son-in-law investment firm

 

[cinnamonandgravy]

EA's yearly profit has been growing in the recent several years, the last one being $6B.

looked it up; net income (money after all expenses are subtracted) was a little over $1B.

not $6B but not bad at all. more than i thought they were making.
they still suck though.

 

[th4tguy]

WTF?

What's the gain for EA in all this? I don't understand this deal.

Everyone in a position to decide on this are the same people who are actually getting paid from that stock by back.
They do not give a shit because at the end of this deal, they walk away millionaires. EA is going to see a mass leadership departure in the next year once agreed upon retention periods end. (Leadership usually agrees to stay on for a specified amount of time to advise before leaving)

 

[Alebrije]

 

[yurinka]

The Saud's aren't steering the ship here. The PE firms are.

Basically the saudis are the ones who will put the money and will get the company. Silver Lake mostly will do the paperwork and will get a cut, JP Morgan will do the debt/financials part and will get their fee. Trump's son-in-law's firm (whose foreign investment is 99% from this Saudi PIF) basically did move the contacts and apparently will put some money (that he got from the saudis here) and will also get a cut. Which like in Silver Lake's case, very likely a few years later will sell it to the Saudis getting some profit.

Once the operation is done, of course the saudis will be the ones steering the ship here. There's absolutely no reason to think another thing.

Neither of these lot know a thing about managing big businesses in high risk creative industries but they will own their Executive MBA hubris and believe that they can apply the same tried and tested PE playbook shite they do across other sectors here without any consideration to the realities of the business and the risk it will effectively create that will inadvertently destroy their core business and not build it.

None of them will manage EA, they are just helping the saudis buy EA, who will keep the current EA management running the company.

Saudis that btw already bought a did help grow another top gaming company, which now could create a great synergy with EA: Scopely. Plus also own ESL or EVO, so could help EA in eSports.

In a heavily creative sector like games and movies, TALENT is your only REAL IP.

Another stupid take.

IPs are key in gaming and movies, more than talent. EA is a good example where several IPs have been top tier during decades even if the talent kept rotating. And in any case, the saudis are buying EA, which also includes both their IP and talent. They won't put Trump's son-in-law to direct the next EAFC or Battlefield.

These lot will understand that even less and they're already making noises about their intentions to erode talent by replacing it with AI labour/processes.

AI won't replace the talent needed at EA or at any other top gaming company. People running EA (or the Saudis) aren't stupid as you think. In fact it's stupid to think they are the stupid ones.

They think they can slim costs simply by cutting spending

They never said that at all. What they said instead is that the heads of EA will continue being the same ones they have now. They didn't say anything about cutting costs.

How badly and how quickly will depend on how long it take for the existing exec team's golden handcuffs to expire before they fuck off when their multibillion checks finally clear…

EA will now when needed will have access to virtually nearly infinite money from the saudis, who won't care about short term profitability or revenue growth as public stock market did. They aren't buying EA for the profit or to sell it later. They are buying it to give prestige to their portfolio.

The price may ask to boost the rating of his team or Cristiano Ronaldo in EAFC, and may ask them to bring back some forgotten IP he loved even if doesn't make financial sense and will pay it from his pocket (as did with getting a Fatal Fury Mark of the Wolves sequel). He may ask to get rid of the woke/DEI stuff (or not). Other than this will let them do their job and will provide them any synergy they may ask for with any other company of the group, as did in the other companies. As could be to merge Scopely (including Niantic) with EA Mobile. That's all.

 

[simpatico]

Should GAF buy the Dragon Age IP?

 

[Durin]

Don't really care, they make nothing I want to consume anymore.

Anything that shakes them up has a chance of maybe them making something better, or giving IP to someone who can do better. I can watch and wait.

 

[poppabk]

Obviously banks aren't stupid and do it only in cases where they know the acquirer and the company won't have any issue to pay that debt.

Due to different factors, Toys R Us was already fucked up and stagnant before the leveraged buyout acquisition. Basically had stagnant sales with a tiny market and other retailers like Walmart, Target or mainly Amazon were eating their market share, plus Toys R Us had many huge stores that were too costly.

The ones who bought it failed at trying to fix and modernize the company, and took a too large debt that the company wasn't able to pay.

It's a very different case of the EA one: EA is a very

I was just pointing out that - yes sometimes banks are stupid.

 

[yurinka]

I was just pointing out that - yes sometimes banks are stupid.

Not the case of the EA acquisition. EA is a very healthy company that makes a lot of money, and both the Saudis and Silver Lake have a ton of money too. Trump's son-in-law doesn't have that much money, but has friends like Soros or Mohammed bin Salman who give him the money he needs to make investments.

There won't be any issue to pay this debt.

 

[diffusionx]

A $50 BILLION valuation? How the fk and in what kind of corrupt and bullshit system built by the rich and only for the rich did that happen? How could the buyers afford that?

edit: Oh wait. Saudi Arabia is being used as a money laundering route for all that sweet tariff money ?

EA's market cap (value of all outstanding shares) before the announcement was around $43B, so that's a premium of about 15% which isn't crazy.

 

[Robins]

Exactly what i was thinking.

 

[winjer]

20billion dollars in debt is a lot of money. I bet there will be several studios closing down very soon.